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Huawei to start demanding 5G royalties from smartphone makers

The move could create a potentially lucrative revenue source for the beleaguered Chinese firm

Huawei has announced it will charge royalties for the use of its 5G phone technology as it looks to open up new revenue streams. 

Jason Ding, the company’s head of IP, said that Huawei hopes to raise around $1.3 billion in revenue from patent licensing between 2019 and 2021, as reported by Reuters. He added that for every phone that uses Huawei’s 5G technology, the company will receive up to $2.50 in royalties.

This move could affect companies like Apple or Samsung if they choose to use Huawei's patented 5G technology in their smartphone devices.

The company added that by the end of 2020, it had over 100,000 active patents in over 40,000 patent families worldwide.

Huawei, along with its rivals Samsung, Nokia, Ericsson and Qualcomm, is one of the leaders of 5G technology. Although the company has achieved positive growth for both 2020 revenue and profit, the company’s smartphone business remains under pressure because of the US trade ban.

At the start of the month, it emerged that the Biden administration was set to continue with the tough restrictions on Chinese tech firms implemented in the Trump-era. Huawei had been labelled as a security threat based on perceived ties with the Chinese government, with a concern that its telecommunications business will be used for surveillance.

In January, the Trump administration also decided to revoke certain licenses that allow US firms to sell to Huawei. In September, Huawei had to stop the production of its most advanced smartphone chips as a result of other US sanctions.

As a result of not being able to access US software and hardware supplies, the company was forced to develop its own mobile operating system and find alternative chip manufacturers. Since mid-2019, Huawei smartphones have also been devoid of Google apps like Gmail because of the Trump administration’s blanket ban of the networking giant.

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